Sentiment among large Japanese manufacturers was unchanged in June amid global economic uncertainty following Britain’s vote last week to leave the European Union, the Bank of Japan’s quarterly survey showed Friday.
The closely watched Tankan index was flat at plus 6, beating the average estimate of plus 4, according to a poll by Kyodo News agency. Positive numbers indicate the extent to which optimists outnumber pessimists.
Large manufacturers expect the index to be unchanged in the next quarter, the survey showed.
The index for large non-manufacturers fell to plus 19 from plus 22 for the second straight quarter of decline, according to the survey.
Large corporations in the manufacturing and non-manufacturing sectors expected their capital investment to rise 6.2 per cent for the current financial year through March 2017 from the previous year, compared with a 0.9-per-cent drop in the previous survey three months ago.
That was good news for Prime Minister Shinzo Abe’s government, which sees strong corporate investment as key to propping up the world’s third-largest economy.
Japanese exporters, however, are concerned about the yen’s steady rise and slow growth in emerging economies such as China, Japan's largest trading partner.
The yen has climbed about 14 per cent against the dollar since the start of this year. The appreciation of the currency makes Japanese products less appealing abroad and erodes the revenues of exporters.
The Tankan survey also showed business confidence among medium-sized manufacturers fell to plus 1 from plus 5 while the index for small manufacturers dropped to minus 5 from minus 4.
The central bank surveyed 10,862 companies from May 30 to June 30 for the survey.